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Bayesian Persuasion

  • Emir Kamenica
  • Matthew Gentzkow

When is it possible for one person to persuade another to change her action? We take a mechanism design approach to this question. Taking preferences and initial beliefs as given, we introduce the notion of a persuasion mechanism: a game between Sender and Receiver defined by an information structure and a message technology. We derive necessary and sufficient conditions for the existence of a persuasion mechanism that strictly benefits Sender. We characterize the optimal mechanism. Finally, we analyze several examples that illustrate the applicability of our results.

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Paper provided by www.najecon.org in its series NajEcon Working Paper Reviews with number 814577000000000369.

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Date of creation: 14 Oct 2009
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Handle: RePEc:cla:najeco:814577000000000369
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